In re the Estate of McCaffrey — 20 N.Y. St. Rep. 5

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In the Matter of the Estate of William H. McCaffrey.

(Supreme Court, General Term, Third Department,

Filed November 20, 1888.)

Headnote

Trustees—Power to lease—Trust estate during the life op the BENEFICIARY—1 B. S., 728, § 55.

Perry executed to Shoudy a deed by which he conveyed a lot of land in trust, to receive the rents and profits and pay the same to Harriet Perry for her natural life. On her death the land was to be sold in partition. One-third was to be vested in one daughter, another in the trustee in trust, to apply the income to Helen A. Perry till she became twenty-one, and then to vest in her in fee, and another to vest, in the trustee, in trust, to apply the income to Mary L. JSggeling during her natural life, and upon her death to revert to her descendents in fee. Payne, the successor of Shoudy, executed a lease to William McCaffrey for five years, and in 1885 Chap

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man, the successor, executed a renewal of the lease for five years. Harriet Perry died May 10, 1886. EM, that it is doubtful whether, under 1 B. S., 728, § 55, subd. 1, the trustees would have any power to lease. But that under subd. 8, under which this trust was created, the estate of the trustee must terminate with the life of the cestui que trust, and that, therefore, the lease ceased to be valid upon Helen Perry’s death. Distinguishing •Greasony. Keteltas, 17 H. Y. 491.

In 1811, John S. Perry executed to Joseph A. Shoudy a deed by which he conveyed a lot of land in trust. The trust was to receive the rents and profits and pay the same to Harriet Perry for her natural life. On her death the land was to be sold or partitioned. One-third was to be vested in Annie E. McCaffrey, a daughter of said Harriet, her heirs and assigns. Another third was to be vested in said trustee, in trust, to apply the income to Helen A. Perry, another daughter, till she became twenty-one, then that third to vest in her in fee. Another third was to vest in said trustee, in trust, to apply the income to Mary L. Eggeling, another daughter, during her natural life; at her death that third to go to her descendants in fee, living at tier death.

It was further provided that if either Annie, Helen A. or Mary L., should die without lawful descendants, the share of the person so dying should go to the other two or the survivor of them, except that any share which would otherwise go to Mary L., should go to said trustees for her benefit.

On September 22, 1880, Payne, the successor of Shoudy in the trust, executed a lease of the land to William H. McCaffrey for five years from May 1, 1881, with a privilege to McCaffrey of renewal for five years more.

On the 13th of March, 1885, Chapman, then the successor of the trustees, executed a renewal of the lease to McCaffrey for five years.

. Harriet .Perry died May 10, 1886.

McCaffrey paid no rent under the renewal, and at his death, November 2, 1886, $5,000 rent were unpaid.

. His widow, Annie E. McCaffrey, aforesaid, afterwards married one Wilder, and was appointed administratrix with the will annexed of McCaffrey.

She filed an inventory of his personal estate; but did not place therein the said lease.

On the application of creditors of McCaffrey, the surrogate ordered her to place on the inventory, said lease, and also ordered her and the appraisers to estimate the value thereof from November 2, 1886, to May 1, 1891, and insert it in the inventory. _

_ The administratrix appeals.

Mr. Moak, for app’lt; Mr. Brackett, for resp’t.

We find no authority for the surrogate1 to direct the appraisers as to the manner in which they are to estimate the value of the property. This they are to do according to the best of their knowledge and ability. 1 R. S., p. 82, § 4. Nor is there any requirement of law, so far as we are aware, which requires the administratrix to make any estimate of the value of the property inventoried. 1 R. S., pp. 82, 84, §§ 2, 16.

The important question, however, is whether the estate of McCaffrey has a valid lease which the administratrix should put into the inventory. Code, § 2715. The trust estate in the whole property ceased at the death of Harriet L. Perry, both by the express words of the deed (1 R. S., 729, § 61) and by the provisions of statute. 1 R. S., 730, § 67. The purpose of the trust then ceased, and the remainder vested in possession. Mrs. McCaffrey became the owner in fee of one-third, subject, however, to be divested should she die without lawful descendants. Hawley v. James, 5 Paige, 318; Miller v. Wright, 109 N. Y., 394 .

Perhaps after her death the trustee had a power to sell or to partition; but this was simply a power, and did not continue the title. Mrs. McCaffrey had a right to take her third. Prentiss v. Janssen, 79 N. Y., 478 ; Cutler v. Fairchild, 41 id., 289. This right was not destroyed by the contingency that she might die without descendants. A fee may be limited as a fee. 1 R. S., 24, § 724.

As to the other two-thirds a further several trust was created. Nothing appears in the case to show whether either or both of those trusts have ceased, or to show what is their condition. Perhaps it is not material in this case. Because the position taken by the creditors is. that the trustee for the life of Mrs. Harriet L. Perry had power during her life to make a lease of the whole property which should extend and be valid beyond the fife estate which he held; subject only to the right of a court of equity to set it aside as improvidently made.

If an estate had been given to Harriet L. Perry for life, with remainder over to the persons mentioned in the deed, we suppose that she could not have executed a valid lease to extend beyond her life estate. It was to avoid that difficulty that the statute authorized a power; probably the only special and beneficial power now valid. 1 R. S., p. 733, section 87, subdivision 2. And it would seem strange that one who holds an estate in trust for the life of another should have a power oyer the remainder, which would not have belonged to him if he had held the estate absolutely for life, and not in trust. Probably the deed of trust might have given to the trustee a power in trust to make leases which should extend beyond his estate. 1 R. S. M. P., 734, section

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95. subdivision 2. But nothing of that kind was done, and the authority of the trustee to affect the remainder after Harriet L. Perry’s life must depend on the estate which he had. ' '•

Before considering the subject further we may say that it might be urged that, in respect to the other two-thirds, there was a continuance of the trust in the same trustee; and therefore that the lease was binding on those two-thirds so long as the trust estate continued. But we need decide nothing on that point, for nothing is shown as to the present .condition of the trust in respect to those two-thirds. The parties interested do not seem to be before us. The appellant here is Mrs. Wilder, who is the owner in fee as above stated of one-third, and whose rights as such owner are affe'cted, if the lease is held valid against her estate.

There are some decisions on this point upon which the creditors rely, and which probably controlled the surrogate; and they should be examined, carefully now. The cases on which they principally rely, are Newcomb v. Keteltas, 19 Barb., 608 , and Greason v. Keteltas, 17 N. Y., 491 . Both of these arose on the same trust, and it is important to notice that that trust was created in 1817, and before the enactment of the Revised Statute. When it was created, as may be seen by any reference to the old doctrine, the law of trusts differed much from the present law. The Revised Statute abolished all uses and trusts as they had theretofore vested and established a new system 1 R. S., 727, section 45.

The case of Greason v. Keteltas, was decided by the court to be an action at law to recover $1,200.

The trustees had executed a lease for twenty-one years, with a clause that they would renew for twenty-one years, unless they paid the appraised value of the building put on the land by the lease. They would not renew nor appoint an appraiser. The lessee recovered the value of the building. • It does not appear that the estate of the trustees had terminated. Indeed, it would, seem that it had not. The doctrine stated in the head note in not sustained by the decision.

In Newcomb v. Keteltas, it appears by the statement that thd two daughters of the testator were living, and probably his son John. So that the estate of the ‘trustee had not ceased, because the cestuis qui trust were living. The lease in question was similar to that in the previous case, and the plaintiff, the lessee, asked either the value of the building or a renewal of the lease. A demurrer to the complaint was overruled. Therefore, the question as to the power to grant leases beyond the trustee’s estate was not involved. But it will be seen that, throughout the decision, it is assumed that the fee was vested in the trustees. The

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court say the trustee can alienate the estate to a purchaser for a valuable consideration. Under the present statute he cannot. 1 R. S., 730, § 65. And then the court say that all those capable of alienating property may make leases, which will endure as long as their interest in the thing leased, but no longer. And it will be seen that the argument rests on the basis that the trustee has a fee and a right to alienate.

Labatut v. Delatour ( 54 How., 433 ), only follows the two preceding cases.

There is not then a case cited where the doctrime claimed by these creditors hás been decided, although much has been said in opinions.

Of course it is not to be denied that there are trusts under which the trustees take a fee, such as trusts to sell lands for the benefit of creditors, or to sell, mortgage or lease lands for the benefit of legatees, etc. 1 R. S., 728, § 55, subd. 1 and 2. But it is doubtful whether, under subdivision 1, the trustee would have any power to lease. And at any rate, under subdivision 3, under which this trust was created, the estate of the trustee must terminate with the life of the cestui que trust.

We think, therefore, that so far at least as Mrs. McCaffrey’s one-third is concerned, the lease1 ceased to be valid. And that as administratrix of Mr. McCaffrey, she was not required to put it in the inventory.

We decide nothing as to the other two-thirds. The facts are not before us.

Order reversed, with ten dollars costs and printing disbursements.

Land on and Ingalls, JJ., concur.